PitchBook agtech analyst Alex Frederick says that it’s premature to declare a full recovery, “cautious optimism is warranted.” Several factors are driving the uptick in VC funding in agtech, including “stabilizing valuations after the market volatility of recent years, allowing investors and founders to find common ground; a focus on larger investments in companies with the strongest potential; and a general shift towards quality over quantity in deal-making,” explains Frederick.
A rebound in VC investment into agtech that began in Q2 2024 continued in Q3, according to the latest update from PitchBook. In total, PitchBook logged $1.6 billion invested over 159 deals across the agtech sector. Despite a challenging exit environment, PitchBook says valuations for agtech startups of all stages have increased in 2024.
Agtech deal value grew +15% quarter-over-quarter (QoQ). However, deal counts continued to decline, falling -17.6% from Q2 2024, in keeping with a trend that’s been ongoing since 2022 and suggests “a shift toward larger, more strategic investments in the sector,” according to PitchBook. Deal size and activity varied significantly across different stages:
- Seed and early-stage agtech startups achieved record deal sizes, although fewer total deals are being closed.
- Median pre-seed/ seed deal sizes in 2024 have risen +92.8% from last year, surpassing peak levels achieved during the zero-interest-rate period, while early-stage deal sizes are up +100% YoY.
- Late-stage VC deals saw a +13.1% increase in median deal size due to limited exit opportunities.
- Many late-stage startups that have remained private while awaiting future exit opportunities have struggled to maintain their peak valuations
Among the agtech subsegments, aquaculture saw the largest increase in deal activity, with 15 deals in Q3 compared to Q2’s 7 deals. The segment attracting the most VC capital is ag biotech, with startups raising $857 million across 57 deals. That was followed by agrifinance & e-commerce ($171 million raised across 23 deals), animal ag ($86 million raised across 23 deals), and indoor farming ($30.1 million raised across 11 deals).
Colossal Biosciences, a biotech firm using genetic technology to revive extinct species and promote conservation, secured the largest agtech deal of Q3, raising $162.6 million and achieving unicorn status with a $1.6 billion valuation. Other notable deals include autonomous electric tractor developer Monarch’s $133 million Series C and plant biotech company Switch Bioworks’ $23.6 million seed round. The full report is available HERE.
